Shares of Ansys Inc. declined Tuesday after an analyst downgraded the engineering and design software company saying the slowing U.S. manufacturing economy may affect demand for its products.
Jefferies analyst Ross MacMillan downgraded Canonsburg, Pa.-based Ansys to "Hold" from "Buy," and said he finds it challenging to believe that the stock will move materially higher in the near future.
Nonetheless, MacMillan expects a strong second quarter _ though with "some change" in the tone of demand.
"Our checks generally suggest that ANSS had another good quarter," he wrote in a note to investors. "But for the first time we heard of some deal delays/postponements due to pain in the U.S. auto industry and the impact of higher oil."
The analyst said while delays are isolated to certain verticals and seem U.S. centric, if they indicate the start of a trend, it may get harder for ANSS to continue to show the magnitude of upside it has in recent (quarters)."
A representative for Ansys could not immediately be reached for comment Tuesday afternoon.
MacMillan said the downgrade is due to valuation. He kept his target price at $48.
The company's shares fell $2.12, or 4.5 percent, to close at $45. The stock has traded in the 52-week range of $24.86 and $49.86.
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